Economic offenses require a distinct approach in bail considerations, emphasizing the seriousness of the allegations and the evidence of wrongdoing.

ORDER :

PRAVEER BHATNAGAR, J.

1. The present criminal bail cancellation application filed under Section 439(2) of Cr.P.C. has been preferred by Union of India through Additional Director General of GST Intelligence, Jaipur against the order dated 03.11.2023 passed by learned Additional Sessions Judge No.2, Jaipur Metropolitan-II whereby, bail application No.179/2022 under Section 132(1)(c) & (f) of CGST Act, 2017 (from now on referred to as ‘CGST’) was accepted.

2. Learned counsel for the petitioner submits that the learned Court below committed an error while granting the bail to the present respondent, Gautam Garg. The learned Court below has observed that the statement of respondent Gautam Garg was not recorded under normal circumstances; there was no evidence that Gautam Garg is a Manager in Firm M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai & Sons and M/s Gurbax Rai Praveen Kumar. No electronic evidence was found on the residential premises of Gautam Garg; the department could not produce the reasons for believing in the arrest of Gautam Garg. The State Goods and Services Tax Department of Rajasthan has issued a summons to Gautam Garg. Two proceedings cannot run simultaneously. Lastly, the evasion of Goods and Services Tax (from now on referred to as ‘GST’) is only Rs.7.48 crores. After relying upon the judgment of Hon’ble Allahabad High Court, the Court below allowed the bail application of Gautam Garg.

3. Learned counsel for the petitioner further submits that the above observations in the bail application are contrary to facts. Learned counsel for the petitioner submits that respondent Gautam Garg, in his statement recorded under Section 70 of the GST Act, has clearly stated that he and his uncle Lovkesh Kumar collected fake bills from fake and non-existent firms based in Sirsa Haryana without supplying any goods for the three companies namely; M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Parveen Kumar. The facts also disclose that in a search conducted by the Department, Rs.4.00 lacs were found in the residence of respondent Gautam Garg.

4. Apart from the evidence of petitioner under Section 70 of the GST Act, pre-signed chequebooks, weighbridge receipts, details of jeans brokers, purchase invoices and raw slips related to the firm M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Parveen Kumar were also recovered from the residence of Gautam Garg and Lovkesh Kumar. Further, two WhatsApp groups were found on the mobile of Gautam Garg, in which Gautam Garg and Lovkesh Kumar were members, and evidence of GST evasion by the said firms was found in the said WhatsApp group. The search was conducted under Section 67(2) of Central Goods and Services Tax Act, 2017.

5. Further, Gautam Garg in his statement, has also stated that recovered cash is related to the business activity of M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar. The respondent also made available the cash books to the said firms. In the statement, respondent Gautam Garg has also stated that firms, namely M/s Gurbax Rai Cotton Industries, M/s Gurbax Rai and Sons & M/s Gurbax Rai Praveen Kumar did not receive any goods, and only the bills received from the firms are from the fake firms. In the search operation, many documents and electronic evidence related to the firms were found in Gautam Garg’s residence and mobile phone. Learned counsel further submits that as per amended Section 132 of CGST Act, whoever commits or causes to commit and retain the benefits arising out of any supplies, any goods or both, without issue of any invoice in violation of provisions of CGST Act or the rules made thereunder, to evade tax and issues any invoice or bill without supplying the goods or avails Input Tax Credit (from now on referred to as ‘ITC’) using such invoices or bills referred to in Clause B or fraudulently availing ITC without any invoice or bill is punishable by up to five y